ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Direct Indexing
    • Disruptive Technology
    • Energy Infrastructure
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Financial Literacy
    • Fixed Income
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Multifactor
    • Night Effect
    • Portfolio Strategies
    • Responsible Investing
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. 3 Vital Drivers For Invesco’s BulletShares ETFs
News
Share

3 Vital Drivers For Invesco’s BulletShares ETFs

Sep 25, 2019
2019-09-25

Tim Urbanowicz, Invesco’s Senior Fixed Income ETF Strategist, discussed with ETF Database a few key drivers showing why BulletShares ETFs is a great space to look into from a macro perspective.

One aspect is seeing how global yields have forced a lot of demand from overseas investors to take on more credit duration and currency risk.

The first half of the year showed the bid from non-US investors was firm with investment-grade corporates, which has allowed for a very nice tailwind for investment-grade credit. However, things have gotten worse overseas, so there are more buyers on a hedge and non-hedge basis, creating a steady stream of demand for investment-grades.

“So, the yield squeeze should be all-in-all supportive for US investment-grade,” Urbanowicz says.

A Supportive Fundamental Backdrop

Additionally, there’s a supportive fundamental backdrop. A significant concern over the past few quarters has been the amount of debt that’s been added to corporate balance sheets in recent years.

That in mind, as Urbanowicz explains, there’s been some deleveraging taking place. Q2’s earnings season, in particular, showed an unexpected growth of about 2.1%.

“For us, looking at the investment-grade story, that remains supported because we do believe now that if you see that earnings growth, a lot of these companies will have the ability to de-lever before the economy does turn in a more meaningful way,” adds Urbanowicz.

Another driver is what has been seen historically in the investment-grade credit landscape. A big concern is the 2 and 10-year inversion; what that could be indicative of, and what that’s been predictive of in the past.

Looking back at from the late 90s through the mid-00s, these are the last four times the curve has inverted similarly. That in mind, looking at the 12 months following that inversion, every single period has shown investment-grade post positive total returns, many of which have been entirely meaningful.


Content continues below advertisement

high yield returns post inversion

“All that to say, when you look at the historical data and the fundamentals, as well as the technicals from overseas buyers, we think that really makes a strong case. So, for investors that are looking for that basic quality, when we talk about being targeted in picking your spots on the curve, that one-to-three maturity, you’re still getting a nice pick-up over Treasuries, but you have a lot less default and even mark-to-market risk in those defined or target maturity funds.”

Related:3 Rally Treasury ETFs as Safety Bets Send Yields Reeling

It’s a good look. With a lot of uncertainty around rates and the large movement that’s been seen, the defined maturity BulletShares allow investors to put these factors aside and stay focused on the predictable outcome.

Another vital thing to keep in mind is how holding 2020, 2021, and 2022 High Yield BulletShares maturities will allow investors to maintain high yield exposure, while potentially limiting some of the volatility associated with broad-based high yield investments.

This article originally appeared on ETFTrends.com

» Popular Pages

  • Tickers
  • Articles

Jun 05

The Diversified Approach to Investing in the AI Sector

Jun 05

World Markets Watchlist: June 5

Jun 05

Direct Indexing Can Do What ETFs Can’t

Jun 05

Don't Miss These 4 Benefits in Pan-Asian Dividends

Jun 05

NSPL Dampens Volatility and Prepares Portfolios for a Recession

Jun 05

Look Down the Cap Spectrum for Opportunities in Industrials Sector

Jun 05

NYSE’s ETF Leaders: Trevor Terrell of Innovator ETFs

Jun 05

AI Innovation ETF WTAI’s AUM Doubles in a Week

Jun 05

Top-Performing ETFs: Crypto Funds in the Lead Again

Jun 05

Being a Trans-Friendly Financial Advisor

QQQ

Invesco QQQ Trust

SPY

SPDR S&P 500 ETF Trust

JEPI

JPMorgan Equity Premium...

VTI

Vanguard Total Stock Market...

VOO

Vanguard S&P 500 ETF

VGT

Vanguard Information...

TLT

iShares 20+ Year Treasury...

BND

Vanguard Total Bond Market...

XLP

Consumer Staples Select...

BOTZ

Global X Robotics &...


Content continues below advertisement

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X